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Connecticut Bankruptcy Law Blog

What information is required when you file for Chapter 13?

Since you have discovered that your growing debt is creating extreme difficulties in your ability to repay your lenders on time, you have considered filing for bankruptcy in Connecticut. With your decision made, you are now working to file your claim and hear the outcome of your request. Understanding the information that is required for your claim to be considered is important to save yourself time by completing the documentation correctly from the start.

According to the United States Courts, you will need to make a comprehensive list of all of the property that you own. You will also be required to detail how much income you are receiving including where it comes from, how frequently you receive it and how much each payment is for. Along with this, you will need to disclose an approximated list of your expenses and where your money goes once you receive compensation of any kind. A complete list of the entities that you owe money to, including for how much and what for, will be required to complete your claim. 

How do people view their personal debt?

If you are one of the numerous Connecticut residents struggling with rising credit card balances and other debt, you may have quite negative feelings about the amount of debt you have accumulated, often out of necessity. Although most people keep their financial situations private and refuse to share their fears and concerns with others, it may help you to know what a recent survey of Americans revealed about the feelings they have with regard to their personal debt.

As Discover.com reports, a full 80 percent of those surveyed said that they have a minimum of one type of debt, often a home mortgage or medical debt. Nevertheless, the majority of them do not feel that they have too much debt. As a matter of fact, the figures show the following:

  • Forty percent say they have too much debt, with 47 percent of these people fallng within the 35-54 age bracket.
  • Forty-three percent of those saying they make less than $25,000 each year believe they have too much debt.
  • Only 34 percent of those saying they make over $75,000 each year believe they have too much debt.
  • Educational level has little or no bearing on a person’s feelings about debt. Thirty-nine percent of those with a high school education believe they have too much debt, while 38 percent of those with a college degree feel the same.
  • Not surprisingly, only 18 percent of the people who said they believe they have too much debt feel happy about it.

How can you strip away a second mortgage?

There are several reasons homeowners take out a second mortgage on their homes, including but not limited to skirting homeowners' insurance requirements, utilizing the equity in one's home or borrowing against the home. Whatever your reason for pulling out a second mortgage on your Connecticut home, do not feel bad if your second mortgage has put you in over your head debt-wise. Also, know that relief options are available to you that do not involve foreclosing on your home.

According to SF Gate, you may be able to strip off your second mortgage via bankruptcy provided your home does not have equity in it and that you meet eligibility requirements. This is because bankruptcy courts, on occasion, treat second mortgages as unsecured loans. If you plan to go this route, there are a few steps you need to take before obtaining financial relief.

Hundreds of Sears stores set to close in Chapter 11 bankruptcy

The modern age of internet shopping and big box stores hasn’t been good for many companies, even stores that have been successful for decades. Competition can be good when it keeps prices down for consumers, but too much of it can make it hard for some stores to compete. Consequently, some have no choice but to file for Chapter 11 bankruptcy or close their doors. Many residents of Connecticut and elsewhere may consider the closing of numerous iconic stores the end of an era.

The national retail giant Sears is not exempt from competitors luring away enough of its customers to have a significant impact. According to News 12 Connecticut, the Sears company, which has been in business for 130 years, filed for Chapter 11 bankruptcy last October. Spokespeople have cited numerous reasons the retailer is experiencing difficulties, particularly competition from other local businesses and online shopping. The Great Recession of several years ago is also said to have contributed to the company’s lingering difficulties. After 182 Sears stores nationwide were set to close, an additional 80 were scheduled to close their doors by March.

How do I get ready to file for bankruptcy?

As we discuss in numerous posts in this blog, you may want to explore other options before you file for bankruptcy or go through with a foreclosure. However, you and other Connecticut residents may decide that a personal bankruptcy is the best route to take, after all. You may not be able to get through insurmountable financial challenges on your own, or you may just need the fresh start that a Chapter 7 bankruptcy offers.

Regardless of your reasons for following through with a bankruptcy, you will need to understand that you don’t just walk into a lawyer’s office, fill out some papers and walk away with that clean slate. As NerdWallet explains, there is a process to go through when filing for either Chapter 7 or Chapter 13 bankruptcy, and it may be lengthy. However, waiting a few weeks or months for your bankruptcy to be approved may be far preferable to struggling with financial challenges indefinitely.

How are zombies real in the bankruptcy world?

You might think that zombies are merely a product of Hollywood and books. While this is true when it pertains to the undead coming for your brains, a different type of zombie can threaten Connecticut homeowners who are facing a foreclosure. The term for a home that is languishing in the foreclosure process is a zombie foreclosure.

The name sounds amusing, but zombie foreclosures are anything but funny. As CNBC describes, a foreclosed home typically becomes zombified when homeowners feel they have no other option than to walk away from their house and abandon their mortgages. Rather than complete the foreclosure and put the house back on the market, many banks would allow the home to sit without selling it to new owners, depreciating in value and lowering the values of other homes in the neighborhood. Fortunately for you and others, the practice of allowing abandoned homes to become zombies occurs less often than it did just after the housing market crash.

What is Connecticut’s small loan law?

You may have some familiarity with the concept of payday loans, especially if you are not a native Connecticut resident and come from a state where payday loans are legal. State laws restrict payday lending to protect you and other consumers from the egregious abuses that often accompany such loans. However, as previous posts on our blog have explained, there are other ways that vulnerable consumers can be victimized by predatory lending.

You may be interested in learning about the state’s small loan law, which restricts payday lending, as the Connecticut General Assembly explains. The law works in the following ways:

  • The law prohibits the assignment of wages as loan collateral.
  • A small loan lender must be licensed with the Banking Department.
  • Interest rates on a small loan may be higher than traditional loans but are often significantly lower than astronomical payday loan rates.
  • Lenders, including credit unions, banks and pawnbrokers, can offer up to $15,000 for a small consumer loan.

Medical expenses responsible for many bankruptcies

As many Americans struggle to keep up with their credit card debt, mortgage and other expenses, a number of people are forced to file for bankruptcy as a last resort. The most common cause of bankruptcy, however, is related to medical debt. Many people in Connecticut and across the United States can no longer keep up with extensive health care expenses. It is reported that one in three families in the U.S. struggle to pay for medical treatments, racking up credit card debt and draining their bank accounts in the process.

One reason why medical expenses have mounted may be the issue of high deductibles, copays and premiums. People are forced to pay high premiums to receive their insurance coverage, but then must pay a high out-of-pocket deductible before the insurance plan starts to cover anything. Furthermore, there are co-pays during that time and even after the deductible has been met.

An automatic stay may stop creditor harassment

When people are behind on their credit card payments, mortgage payments or have excessive medical debt, they may begin to receive creditor calls. At first, the calls may start out as a friendly reminder for clients to make a payment on their loan. As time passes, however, those calls can turn a bit more sinister and, in some cases, become harassing. Once people file their paperwork for Chapter 7 bankruptcy, an automatic stay moves in place, which prohibits creditors from contacting debtors regarding their overdue payments.

Creditor harassment can become a huge problem, as companies may threaten to file a lawsuit, use profane language, garnish wages from paychecks, reclaim property and even pursue legal action. These practices are illegal under the Fair Debt Collection Practices Act. With an automatic stay, creditors are unable to harass debtors through phone calls at all hours of the day, wage garnishment, initiating or pursuing lawsuits or threatening through other means.

Relief for credit card debt

When Connecticut residents realize they are overwhelmed with credit card debt, they may sometimes feel like this debt will never go away. However, there are several strategies people can use to remove this debt.

If people want to get out of debt, it is a good idea for them to understand exactly how much they owe. Time magazine says that people should typically sit down and create a list of how much debt they have on each credit card. This list should also include the interest rates so people know how much they are spending on interest each month. Once they have made this list, people may want to look at their budget so they know how much money they can put toward paying off their debt.

Discuss Your Case With A
Respected Bankruptcy Attorney

Contact my office to discuss your debt relief needs directly with me as your lawyer. I offer a free initial consultation to all new clients where you can learn more about your legal options and what I can do to help you. I am available during regular business hours and by appointment at other times. You can reach me by phone at 860-242-0574 and 860-952-3674 or via email.

My law firm is a debt relief agency as so designated by Congress in the year 2005. I help people file for bankruptcy relief under Title 11 of the United States Code, known as the Bankruptcy Code.

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